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U.S. import review to have limited effect on HTC sales: analyst

2012/05/21 13:57:31

Taipei, May 21 (CNA) HTC Corp.'s quarterly sales will likely be affected by the ongoing U.S. Customs review to a limited extent only, as import shipments of the Taiwanese smartphone vendor are being cleared quicker than expected, a Taipei-based analyst said Monday.

"The impact looks as if it will be much lighter than the market expected, as the clearance (of some shipments) has taken only a couple of days, not three to six weeks as previously anticipated," said Jeff Pu, an equity research analyst at Fubon Securities.

Providing the shipments of HTC One X and EVO LTE (long-term evolution) devices are delayed by one to two weeks only, it will lead to only a 3 percent drop in HTC's revenue in the second quarter, much less than the previous forecast of a 10 percent decrease, Pu said.

On April 24, HTC forecast that its revenue will reach NT$105 billion (US$3.56 billion) in the second quarter of this year, up 55 percent from a disappointing first quarter.

"We've heard some positive news from HTC's U.S. distributors. Consumer electronics chain Best Buy Co. is going to sell the EVO LTE on May 23, while mobile provider Sprint Nextel Corp. will sell the model on May 25," he told CNA by telephone.

Although T-Mobile USA and Verizon Wireless have reportedly delayed their offerings of another two HTC phones, the Amaze 4G and the Droid Incredible 4G LTE, following the customs' review, this will not affect HTC greatly due to a smaller contribution of the phones to sales, Pu said.

The One X and EVO LTE will remain as HTC's flagship products in the United States, expecting to account for 60 percent of HTC's total shipments in the U.S. market during the second quarter, he added.

Shares of HTC closed up 1.62 percent at NT$407 Monday on the Taiwan bourse.

A day earlier, HTC said in a statement that some of its smartphones have passed inspections and have been released to its carrier customers.

"We don't have the status of each specific device model at this time, but we are working closely with U.S. Customs. We remain confident that this issue will be resolved soon," said the Taoyuan-based manufacturer.

The statement came after HTC announced on May 16 that the U.S. availability of the One X and EVO 4G LTE had been delayed due to a standard U.S. Customs review of shipments that is required after an exclusion order filed by the U.S. International Trade Commission (USITC).

In an USITC ruling in December last year, HTC was found to be in violation of an Apple Inc. patent involving data-detection technology.

HTC handsets that are imported to the U.S. after April 19 this year will need to be checked by customs authorities for any patent infringement of the function, the company said.

Also on Monday, Economics Minister Shih Yeh-shiang told reporters on the sidelines of a legislative hearing that his ministry "will definitely provide HTC with appropriate assistance."

However, Shih declined to give further details on how and what the ministry can do, saying that since the HTC-Apple case is a judiciary case, the government will keep a low profile instead of touting what measures can and will be taken.

(By Jeffrey Wu and James Lee)
ENDITEM/npw